Market Link Guide - Japan - JGBs
CSD link as defined under CSDRa
Type of link
Indirect via Hongkong and Shanghai Banking Corporation Limited (Tokyo Branch) to Bank of Japan
a. CSD Regulation (EU) No 909/2014, Article 2(29).
Bank of Japan (BOJ)
Hongkong and Shanghai Banking Corporation Limited (HSBC), Tokyo branch
Country of incorporation
Hong Kong via its branch in Tokyo
|Dedicated omnibus account for CBL’s assets held at BOJ, under HSBC’s participant status|
Legal Account name/holder
|The Hongkong and Shanghai Banking Corporation Limited - 0411-7111|
Clearstream Banking S.A.
|Settlement free of payment|
|Settlement against payment|
Eligible settlement currency: Japanese Yen (JPY).
|Settlement against payment in central bank money account of CBL/CBL customers|
CBL holds a cash account at the custodian. Against payment settlement in JPY takes place on the cash account of the custodian at the Bank of Japan.
|Settlement penalty fees|
|Refer to the Market Profile.|
|Multi Market Securities|
|Refer to the Multi Market Securities Guide.|
|Lending and borrowing|
|Liquidity Hub Connect|
|Sale and purchase of rights|
CBL internal settlement.
|Refer to Investment Regulation.|
Moment of entry of instructions
The rules of BOJ do not define the moment of entry within the meaning of the Settlement Finality Directive.
Irrevocability of instructions
JGBs are largely settled under Real Time Gross Settlement (RTGS), which is true DVP. Transfer of JGBs cannot be cancelled once transfer instructions are settled through book-entry system for JGBs, regardless DVP or non-DVP mode.
Finality of instructions
The attribution of rights to the JGBs is final when it is entered or recorded in the transfer account ledgers.
The below section is based on the legal opinions obtained by CBL that were issued on 28 September 2022 (Hong Kong) and 16 December 2022 (Japan). The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.
No insolvency proceedings against the custodian
Liability for negligence
Book-entry regime with in rem rights
Recognition of nominee concept
The laws and regulations of Japan do not have a concept equivalent to the nominee concept.
No right of retention for the custodian
Segregation of assets at the custodian
No right of use
No upper-tier attachments
Insolvency of the custodian with no impact on CBL's rights
Confirmed. Cash held by the local custodian will only give rise to an unsecured claim against the estate of the local custodian on insolvency.
Shortfall pro-rated among holders
Settlement finality in case of insolvency
There is no concept equivalent to finality under Japanese laws and regulations.
Record keeping of at least 10 years
The custodian has committed to record keeping period of at least 7 years in accordance with the statutory law requirement in Hong Kong. Under the laws and regulations of Japan, custodians have the obligation to maintain records for at least 10 years.